Business

Facebook Dodges IRS Summons For SEVENTH Time On Offshore Accounts

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Eric Lieberman Deputy Editor
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Facebook didn’t show up to court after receiving its seventh summons from the IRS to divulge corporate documents pertaining to its offshore tax policies.

America’s central tax collection agency is inspecting Facebook’s federal income tax portfolio for the fiscal year period ending December 31, 2010. The IRS is searching for any areas where the company may have concealed, or at least minimized, its intangible assets, according to Bloomberg.

The tech giant has holdings in the U.S. and Canada, but also has offshore accounts in Ireland — a popular destination for businesses because of its relatively low tax rate. The IRS is suspicious that Facebook undervalued its U.S. income when it sold the rights to an Irish subsidiary at a cheaper price.

If Mark Zuckerberg and his Facebook cohorts undervalued their own company, then they could have purposefully reduced taxable income in the U.S. (which has a 35 percent rate), while simultaneously raising taxable income in Ireland (a 12.5 percent rate). Facebook, however, denied any wrongdoing.

“Facebook failed to appear on June 17, 2016, the date scheduled for compliance with the summonses, and did not produce books, records, papers, and other data demanded in the summonses. Facebook’s failure to comply with the summonses continues to this date,” according to another petition filed July 6.

The tech conglomerate has so far succumbed to some of the federal pressure and supplied certain relevant documents, but hasn’t provided the comprehensive collection of the books, which has data that is explicitly required in the multiple summonses. The IRS refiled a petition to the U.S. District Court for the Northern District of California earlier this week requesting these documents once again.

“Facebook complies with all applicable rules and regulations in the countries where we operate,” Anteneh Daniel, a spokesperson for the social media company stressed in a statement, according to Reuters.

The IRS is frustrated that one of the world’s biggest and most successful companies is dragging its feet and seemingly attempting to circumvent traditional legal processes. The suits are now growing more frequent and more urgent, but Zuckerberg’s Facebook has showed very little urgency itself.

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